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A&P Refinances Credit Facilities

Northeast grocer teamed with Wells Fargo on debt arrangement

September 18, 2014, 02:34 pm
By Bridget Goldschmidt, EnsembleIQ

The Great Atlantic & Pacific Tea Co. Inc. (A&P) has completed the refinancing of its existing senior debt on terms favorable to the company. A&P teamed up with Wells Fargo Capital Finance to arrange the new $300 million senior secured ABL facility and $270 million senior secured term loan through an amendment and restatement of its existing credit agreements.

The grocer's improved capital structure comes in the wake of upgraded ratings outlooks issued by Moody's and Standard & Poor's earlier this year. The new covenant-free debt arrangement enables a considerable reduction in interest expense and enhanced liquidity, which, according to A&P, is indicative of the debt market's confidence in its continuing progress and future growth prospects.

"Our new senior debt puts the company in a much stronger financial position and allows us to focus on investing in our business by supporting and accelerating our growth strategies," noted A&P President and CEO Paul Hertz.

In recent years, the company has struggled financially, emerging from Chapter 11 bankruptcy protection in 2012 as a privately held company and seemingly unable to regain its footing in the years since. Earlier this year, the grocer’s most recent management shakeup saw the departure of CEO Sam Martin, who had come aboard in 2010 to help the chain reverse its fortunes, prompting a longtime industry observer to tell PG that A&P lacked "the right formula" to succeed.

Montvale, N.J.-based A&P operates 300 stores in six states under the A&P, Best Cellars, Food Basics, The Food Emporium, Pathmark, Superfresh and Waldbaum's banners.

By Bridget Goldschmidt, EnsembleIQ

About Bridget GoldschmidtEnsembleIQIn addition to serving as Progressive Grocer’s Managing Editor, Bridget writes many print and digital features encompassing a range of grocery and fresh categories across the store. Bridget also enjoys on-site reporting assignments at such key industry events as the New York Fancy Food Show and the International Boston Seafood Show, in addition to visiting stores for PG’s prestigious Store of the Month feature. In her years with the magazine, she has developed into a knowledgeable voice on grocery industry trends, sought by such distinguished publications as The New York Times. Follow her at www.twitter.com/BGoldschmidtPG.